Companies & Sectors
Mining to resume in Goa but it will not reduce iron ore imports!
When mining operations in Goa is resumed, more than one hundred thousand miners will be able to get back to work, though they are not usefully employed in the mining operations
 
Indian iron ore mining industry is expected to produce 130 million tonnes this fiscal, as against the estimated demand pattern of 140 million tonnes, resulting in imports of over 10 million tonnes due to weaker output from Karnataka, Odisha and Jharkhand.  It may be recalled that the domestic output.  Domestic output has fallen due to restrictions imposed by Supreme Court to curb illegal mining.
 
Iron ore with 63% iron content has fallen steeply, in the international market from $175 to $55 per tonne and the price of Goa ore, which has 56% content has dropped to about $35 per tonne. Goa iron ore quality has been found acceptable only in China, and to some extent in Japan, who have managed to make a product mix with high grade ores from both Australia and Brazil to produce steel.  However, as of now, the demand from China has also gone down, due to general economy slowdown in that country.
 
In 2012, Goa government had brought the mining operations to a standstill and this has now been revoked, pending the lifting of ban imposed by Ministry of Environment and Forests. Leading miners like Sesa Sterlite expect to start their mining operations in about two weeks from now, once they get the MoEF clearance and clarity on dumping waste ‘outside the lease area’, as this is small.
In order to permit dumping of mining waste outside, as the lease area is small, it would be essential for the government to amend the Mines and Mineral (Development & Regulation) Act.
It may be remembered that the Supreme Court had declared dumping of waste outside the lease area as illegal.
 
In spite of the poor international price, which has fallen steeply, the exporters of iron ore have to overcome other obstacles before any further development in this area can take place. The exporter has to pay 30% export duty, 15% royalty and a 10% to the Goa Development Fund.  According to Aniruddh Joshi, Vice President, Corporate Affairs, Sesa Sterlite (Iron ore Business), the central government has to remove the export duty, as a start.  
 
Unlike the Chinese steel makers, Indian steel industry has not been able to come terms with reaching a proper mix of our own poor grade iron ore and high grade ores to make steel in the country!
 
When mining operations in Goa is resumed, more than one hundred thousand miners will be able to get back to work, who, Joshi is reported to have said are being paid more than Rs1 crore per day, though they are not usefully employed in the mining operations!  As for Sesa Sterlite, having received the MoEF clearance, from Karnataka, they would be able to continue their work on 2.9 million tonnes ore from that state.
 
The state government in Goa has released the Mining Lease Policy, which avoids auctions for fear of attracting the "mining mafia" and delays in resumption of mining operations.  The only problem that the Goa State Mines and Geology department appear to have faced is the furore caused by the  renewal of leases, which includes a mine owned by a Pakistani national, Baddrudin Mavani, who appear to have given the power of attorney in favour of Radha S Timblo.  So far, 88 mining leases have been processed, and this department, it is reported, has collected the relative stamp fees for the same.
 
In any case, it will be a couple of months before opportunities may come up for export of these low grade ores from Goa.  In the meantime, Indian iron ore lumps with 62% iron content are now reported to be priced at Rs4,200-Rs4,500, depending upon demand, while international price is said to be Rs3,600. Miners like state owned NMDC are working round the clock to meet the demand but they cannot increase the production overnight.
 
It is hoped that, in line with the relaxation given by the Supreme Court, Karnataka miners would be able to increase their production along with those in three other major producing areas. In the meantime, it would be a good move if export duty is waived in case of low grade iron ore from Goa and steel makers be persuaded to investigate the methods, by which our own mills can use them to the maximum extent possible, so as to reduce the large scale imports of high grade iron ore year after year.
 
(AK Ramdas has worked with the Engineering Export Promotion Council of the ministry of commerce. He was also associated with various committees of the Council. His international career took him to places like Beirut, Kuwait and Dubai at a time when these were small trading outposts; and later to the US.)
 

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Promotional Blitz and Glitz of Cars Does Lead to Sales
A new report busts marketers’ usual spiel
 
Suddenly, the auto world in India has woken up to the realisation that word-of-mouth is the biggest factor that influences a buying decision and this is something they do not have any ‘control’ over. Years of nurturing the established mainstream media and ‘motoring journalists’, at huge costs of time and money, now appear to have gone bust.
 
Until about the year 2000, nobody bothered about the few motoring journalists who were around. Writing and doing television pieces was more of an extension of a hobby; the Internet was still in its infancy and, in one of my early ventures called ‘cybersteering.com’, the owner’s review column was getting stronger by the day. But there was barely any money in running a motoring magazine online or in print, or on television, without aliging with public relations. In came junkets and gifts. 
 
It was a waste. The recent Deloitte Touche Tohmatsu report on how consumers buy automobiles says it all; it brings out how independent word-of-mouth is now the single most important factor. 
Several auto manufacturers entered India between 1998 and 2003. Each one of these was way bigger than Maruti-Suzuki, if you were to go by worldwide sales. This is when their PR/corporate communications push started becoming ubiquitous. 
 
Starting from the Top 
Maruti Suzuki has traditionally not used media junkets for coverage; even now, their media events are at their offices and dealer locations most of the times. They participate in motor rallies, aimed more at the four-wheel drive segment which is now seemingly moving into city specific events. 
 
Hyundai has concentrated more on factory visits and driving experiences in actual traffic conditions in India. There is no involvement in motor-sports; on the other hand, their response to customer queries pre- and post-sales is now on the top.
 
Tata Motors had a chance with their Indica to take the number one spot; but it blew it with the Tata Nano where they appear to have paid too much attention to the motoring media instead of trusting their own instincts. A confused media policy, with a huge bias towards south Mumbai, when customers are nation-wide.
 
The global leaders, Toyota and VW, have also followed with high-intensity media and PR push; trips to Japan and Europe as well as circuit racing are a part of the corporate communication push. This has failed to yield sales for both car-makers which is the reason for their lack of market share in India. 
 
For the rest, FIAT had the best chance, and blew it. M&M, Nissan, Renault and the others, again, lots of PR, but where are the sales? A special mention here of GM which had the best chance to break the Maruti monopoly with its recently acquired Daewoo line-up. This is one company which had decent products and could still break out. But media noise does not translate into higher sales. Solid hard work at the existing customer base does. The Deloitte Touche Tohmatsu report underlines this. Much of it is available online. Check it out.
 

Take a Bus, Not a Cab

 
Travelling to cities where airports are far away from the city centre, for example Kolkata, Bengaluru and Goa/Dabolim, I’ve increasingly felt that using taxi-cabs is not just a waste of money but also tiring, especially with the increasing number of speed-breakers all over India. However, using the option of luxury buses in Kolkata and Bengaluru, takes care of the bump and fatigue part, to a large extent, for 90% of the journey, at least.
 
The reason is simple—most taxi-cabs do not not get their suspensions re-worked after the first purchase. Luxury buses, on the other hand, are not just maintained regularly, but also have bigger tyres and longer wheel-bases, both of which swallow the worst that our roads can offer. I especially liked the options available at Kolkata. 
 
(Veeresh Malik started and sold a couple of companies, is now back to his first love—writing. He is also involved in helping small and midsize family-run businesses re-invent themselves.)

 

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ASCI upholds complaints against 62 Advertisers including P&G, Snapdeal, TV 18 and Hyundai Motors
ASCI upheld 62 out of the 97 complaints received by them in December. Almost a third of the advertisements axed are from the Personal and Healthcare category, followed by Education 
 
The Consumer Complaints Council (CCC) of Advertising Standards Council of India (ASCI) upheld as many as 62 out of the 97 complaints during December 2014. Some of the companies that will now have to pull out their advertisements include Procter & Gamble Home Products Ltd (Pantene Total Damage Care Shampoo & Conditioner), Rich Feel Trichology Centre (Richfeel Anagrow), Career Launcher (CAT Coaching), TV 18 Broadcast Ltd (CNN-IBN), Hyundai Motors India Limited, Reliance Industries Ltd (Reliance Digital)  and Jasper Infotech P. Ltd (Snapdeal.com). 
 
In a pattern similar to November, most of the complaints upheld were from the Personal and Healthcare category (40 out of 62), followed by Education (11) and others such as Automobiles, News Channels and E-commerce. 
 
Some of the examples are: 
 
Procter & Gamble Home Products Ltd's advertisement for Pantene Total Damage Care Shampoo & Conditioner made an unsubstantiated claim that  3,50,00,000 women got the proof of Pantene’s Split-end protection. The only fact mentioned in the advertisement that could be substantiated from the cited survey was that there were 3,50,00,000 users in the study.
 
An advertisement for Richfeel Anagrow by Rich Feel Trichology Centre claimed that it could treat illnesses that lead to hairfall. These illnesses include thyroid, stress, PCOD and dieting.
 
The advertisement for Pillsbury Fridge Cheesecake (from General Mills India P. Ltd) referred to a healthy diet of vegetables and salads as “sada hua salad”.
  
 
 
The advertisement for The Calcutta Medical Research Institute (CK Birla Hospitals) included no disclaimers when it made the misleading claim of providing free checkups. 
 

An advertisement of Max Hospital (from Max Healthcare Institute Ltd) claimed to “save an ill heart” in just 45 minutes. No substantiating evidence or disclaimers were provided. 
 
Along with these, several advertisements for “miracle” drugs and treatments were banned by ASCI. These products make huge claims about being able to cure a wide range of diseases and ailments like diabetes (Shugreen Amrut Drops, Daibinash Churna, GM Pharmacy Range of Products, Aarogya Peeth), hairfall (Biogreen Japakusum, B-Healthy from JM Wellness Private Limited, Krissh Hair Oil from Params Pharma etc.) and impotency (Swapandoshantak Capsule and Krishna Herbal). 
 
Two advertisements from Career Launcher  - one for CAT coaching and the other for the CAT Test Series Program came under scrutiny for making unsubstantiated claims about their ranking and the number of their students who received calls from IIMs. 
 
Complaints against seven other educational institutes were upheld for making false claims about providing 100% placements or about their ranking as Number 1 Institutes. 
 
Jasper Infotech, i.e., Snapdeal.com, in one of its advertisements stated - “1+2 years of warranty valid with Videocon KC50FH (50) Full HD LED Television”, which was misleading. 
 
CNN-IBN of TV 18 Broadcast Ltd also received flak for an advertisement in which it shows a see-saw with one side showing a 'CNN-IBN' with big number 1 outweighing all other numbers on the other end of the see-saw. According to the ASCI Release, “The CCC concluded that the negative portrayal of image of other channels is misleading by implication and disparaging to other competitor channels.” 
 
Complaints against three advertisements from Hyundai Motors India Ltd were upheld – one each against Hyundai Grand i10, Hyundai Grand i20 and Hyundai Xcent. These advertisements violated The Indian Motor Vehicles Act by not showing the registration number displayed in the front of the car while being driven on the road. 
 
Another one from the automobiles category was an advertisement for Bajaj Discover (from Bajaj Auto Ltd), which shows people driving dangerously in a zig-zag manner while also cutting lanes, violating all safety and traffic regulations. 
 
Another advertisement that was axed was one for Reliance Digital, which claimed “zero down payment” without mentioning that the customer did have to pay processing fees while making the purchase. 

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